Pending home sales rose in July to the highest level in over two years and remain well above year-ago levels, according to the National Association of Realtors (NAR).

Lawrence Yun, NAR chief economist, said the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. “While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity,” Yun said.

Yun added, that the limited inventory is constraining market activity. “All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage,” Home prices are expected to increase 10 percent cumulatively over the next two years, Yun said.

Cailfornia Association of Realtors President LeFrancis Arnold said, “We continue to see a strong demand for housing, but the California market is being hindered by a lack of inventory and multiple offers on what little inventory that is available,” “The shortage of inventory has had the most dramatic effect in the REO market, where the available inventory stands at a 1.5-month supply and the share of REO sales dropping 35 percent over the past year.

If you are a buyer wondering what is going on in the market, here you go. With multiple offers on properties and having to wait to see if your short sale is going to go through, it is definitively not for the faint of heart. Don’t get discouraged, your Realtor is doing a good job for you. It is a tough market out there. But on the other hand look what the Federal Housing Finance Agency is doing.

On August 21, The Federal Housing Finance Agency (FHFA) announced changes to align guidelines for Fannie Mae and Freddie Mac short sales and allow lenders and servicers to quickly and more easily qualify borrowers for a short sale.

Over the course of the past year and a half, California Association of Realtors has been working vigorously to address concerns related to short sale transactions. As a direct result of their efforts, they have made significant improvements through discussions with legislators, housing regulators, and lenders.

Here are some specific changes that are effective Nov. 1, 2012:

Eliminates current Fannie Mae and Freddie Mac short sale programs and creates a single standard short sale process for both entities (Fannie and Freddie HAFA programs will expire at the end of the year).

• Enables servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales without waiting for an approval from Fannie Mae or Freddie Mac
• Offers special treatment for military personnel with Permanent Change of Station (PCS) orders.
• Standardizes and clarifies foreclosure suspensions on a property with an approved short sale.
• May pay borrowers up to $3,000 in relocation assistance.
• Fannie Mae and Freddie Mac will offer up to $6,000 to subordinate lien holders to expedite a short sale.

There are changes being made every day, remember there is always a time and a season for everything, you will get through this.

Diane Gallagher is the president of the Lodi Association of Realtors and can be reached at larpres2012@yahoo.com